
The collapsed cryptocurrency lender Celsius is planning to pay back its clients by the end of the year, but it all depends on a court's approval.
Celsius filed a bankruptcy lawsuit Monday on its plan to resume as a user-owned Bitcoin miner and to pay customers whose funds were frozen on the platform since June 2022.
Celsius' lawyer Christopher Koenig, a lawyer for Celsius, said the bankrupt crypto lender is planning to exit bankruptcy with $450 million in seed funding.
The funds will come from crypto consortium Farenheit LLC - the same group that won the bidding on Celsius' assets in May and will manage the mining and staking business of the new Celsius business.
The new version of Celsius will reportedly operate as a 'user-owned Bitcoin miner', leaving the fate of the once successful crypto lending business uncertain.
Martin Glenn, a bankruptcy judge for the Southern District of New York, will decide whether to approve Celsius' plan.
However, the judge's approval of Celsius' restructuring plan also needs to be cleared by security regulators. Although some creditors haven't ruled out the overwhelmingly voted suit, it's still being debated by some debt collectors.
It was previously reported that Celsius had planned to re-launch its company in August. The bankrupt entrepreneur conducted a poll among its customers to find out their views on the plan.
While Celsius said 95% of its customers voted for the recovery plan last month, a Bloomberg report claimed some parties were opposed to it, especially those to whom the company owed, including one creditor who owed about $82 million from the lending business.
The former Chief Revenue Officer of Celsius, Roni Cohen-Pavon, pleaded guilty to four criminal charges last month, including manipulation of the exchange's crypto token Cel, securities fraud and wire fraud.
He also agreed to cooperate with the FBI's ongoing investigations and testify in court if necessary, according to the plea agreement.
Meanwhile, Celsius ex-CEO Alexander Mashinsky sought the suspension of his case filed by the U.S. Federal Trade Commission.